The Wall Street Journal blows it big time with a hyped-up page-one story on how the financial-reform bill would affect farmers. It contains a lot of what’s wrong with how Rupert Murdoch has changed the Journal in the last two-and-a-half years.

Fox-ified headlines? Check.

On several parts of WSJ.com, the headline reads “Financial Overhaul Hits Farmers,” And as we’ve seen often with these hyped up Thomson/Murdoch headlines at the Journal, it doesn’t even correspond with the actual story, which understands that it can’t really say such a thing and emphasizes that farmers are fearing a hit, though as we’ll see below, it reports no such thing, either. You know, it’s like the editors there have pre-determined ideas they want on page one.

As far as headlines go, “Financial Overhaul Hits Farmers” is just about the sweet spot—a Murdochian ideal. As a commenter astutely points out at WSJ.com, “This article is a pathetic attempt to link the “little guy” to the fate of wall street.”

The print edition’s headline is a bit less bad, but still bad:

Finance Overhaul Casts Long Shadow on the Plains

Of course, that’s misleading, too.

Shallow reporting? Yup.

The paper wants you to get the impression that yeoman farmers are getting crushed under the wheel of the new bill. Or that they are afraid they will, which is pretty much not the same thing at all. Instead of clarifying the issues, as a journalist should, the Journal just amplifies the fear—a technique perfected by its corporate cousins at Fox News.

And it’s just smoke-and-mirrors. There are no farmers quoted here worrying that financial reform will hurt them. We get their bankers and brokers, but no farmers. This is as close as we get to a farmer expressing doubt:

He’s watching the new legislation warily and can’t yet tell if it will hurt or help.

One wonders if this farmer was watching the legislation warily before a reporter started asking him questions about whether financial reform would cost him money.

And what percentage of farmers (and we’re not talking ADM and Cargill here) use bespoke derivatives rather than standard exchange-traded ones? I’m guessing it’s extremely small.

Slapdash editing? Uh huh.

What’s this paragraph about payday lenders doing in here?

The full impact won’t be known for years, but in Nebraska nerves are already on edge.

Executives at Five Points Bank in Hastings think the new rules on mortgage lending will make the home-loan business less profitable. “When they create a new regulator, it really scares us,” says Nate Gengenbach, vice president of commercial and agricultural lending.

Advance America Cash Advance Centers Inc. thinks the new Bureau of Consumer Financial Protection will take aim at the payday-loan business, though it’s not clear what steps the agency will take. Advance America’s storefront at the Skagway Mall in Grand Island charges an effective 460.08% annualized interest rate on a two-week $425 loan.

You know, if you’re going to use the sympathetic heartland American farmer as your poster boy for the perils of the government boot, why stick the usury industry over his shoulder?

Editorializing? Maybe this is a stretch, but you have to take it in the context of the whole piece (the paranthetical is mine to make explicit what’s implied):

Designed to fix problems that helped cause the financial crisis, the bill will (instead or also) touch storefront check cashiers, city governments, small manufacturers, home buyers and credit bureaus, attesting to the sweeping nature of the legislation, the broadest revamp of finance rules since the 1930s.

See, the bill is designed to fix problems that caused the crisis, but it’s going to sweep up a whole bunch of people who didn’t. Vote against it, Ben Nelson!

The whole story is just a mess. Lots of farmers use derivatives to hedge against ups and downs in the markets. In fact, that’s why derivatives were invented. Most are already traded on exchanges and aren’t affected. And the rest, for farmers, are specifically exempted, as the Journal itself reports—sort of:

Faced with intense lobbying, Congress partially exempted businesses that use derivatives for commercial purposes. So, farmers and co-ops probably won’t face new collateral requirements, for instance—although there remains a dispute over that section of the bill.

What dispute? We’re not told.

Edmund Andrews says to that graph:

Say what? Farmers and other end-users are exempt from the new rules? Then why are we being subjected to this article?

The truth is that the only players who most certainly stand to lose are the big banks, like JP Morgan Chase and Goldman Sachs, that will have to either spin off their derivatives-trading operations or put them into separate subsidiaries that require higher capitalization.

Megan McArdle says this:

I’ve seen no indication that farm futures are going to be harmed by derivatives regulation, and the rest of it consists of saying, basically, “Some people are worried that they might not be able to get loans.” By that logic, plane tickets to Vegas are an equally big problem for farmers.

And Andrews calls it “hack journalism” and “bogus propaganda.”

It’s certainly not the paper’s finest hour.


Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.